S4E12: Bob Lewis

Welcome to Commerce Famous, a podcast that celebrates the celebrities of our industry. Join us for a conversation with the taste makers in ecommerce. In their daily lives, these are just normal everyday people like you and me. But to us, they are commerce fans. Welcome, everybody, to Commerce Famous episode 12 in season number four.

And I got a pretty exciting guest joining me today, Bob Lewis, the CEO and founder of Impacts. Bob, welcome. Thanks, Jason. It's really great to be here. Really really looking forward to the conversation.

And to be fair, we tried to get you on earlier, but you're obviously a very busy man. So so now you're episode 12, which is one of the last ones of the season, but save the best for last. Am I right? Alright. Season finale.

That's always the best. Let's go. So, Bob, you've been a part you've been basic well, actually, before I dig into the questions, why don't you give a brief introduction to who you are and who Impacts is, and then we'll dig deeper into the conversation. Sure. Sure thing.

So Impacts at at Impacts, we are a digital agency, full service digital agency, working almost exclusively in wholesale distribution. And we really focus on, you know, bringing a strategic approach to the development of our customers' digital channel. And and, in fact, we use that term, by design. You know, that what we see ourselves doing is helping our customers, develop a digital channel, not necessarily build a website. The site is sort of the means to the end.

I've been doing impacts founded impacts in 2018. Prior to that, I had a company called b two x partners where we were doing, strategy work, digital strategy work in the wholesale distribution space. And then prior to that, I had a PIM software company. So I've really been in sort of this, wholesale distribution digital space for about the last twenty five years. Yeah.

Well, what I love about what you just said is it feels like you've you've kinda seen all aspects of b two b commerce as a software developer, as a platform founder, an implementer, a strategist, and, even the user side in wholesale distribution. What is that Absolutely. Yeah. What is that experience at kinda looking at the problem through all these different lens? What advantages that does that create for impacts as you serve your customers?

Yeah. I think it's, honestly, I think it's an invaluable differentiator that that we bring to the market because it really gives us the opportunity to sit in the shoes of our customer and just kind of look at everything they're trying to accomplish from all the different perspectives, the platform provider and and what, you know, what they're hearing from the platform, provider, what we've done on a strategy side, you know, what we've done from an implementation perspective. So it gives us kind of a unique perspective to to put ourselves in the customer's shoes and and really focus on their success. Commerce famous is proudly presented by Shopware, the leading open source ecommerce platform for mid market and lower enterprise merchants. More than 50,000 clients already process over $25,000,000,000 in annual GMV through Shopware.

Find out more about Shopware and the best value in e commerce at shopware.com. Well and one of the things that I love about impacts is how much you lean into complexity. Mhmm. I think it's really great that your your goal is not to, take something that is kinda alpha for for a distributor and make it the same as everybody else. So when you say you love complexity, like legacy ERPs, customer specific pricing, messy product data, complex account structures, when you walk into a distributor with all of that complexity, how do you decide what should be digitized, what should be redesigned, or should simply be left alone?

Like, how do you is there a calculus or a playbook you guys go off of? There is. And and, you know, we really start you know, we start at the very sort of top of the equation. And and one of the things that I ask our our customers when we first meet them is, I said, a year from now, you're gonna sit down and say to yourself, working with impacts is the best decision we ever made. How do you how do you get there?

What what what what metrics are you using to evaluate that? And so it's really kind of trying to understand what defines success for them because a lot of wholesale distributors are at various levels of maturity, and so what constitutes success, you know, sort of varies a little bit. And so we wanna align ourselves with with, with that. And then once we understand that, then that sort of kinda gives us a path into figuring out, you know, what are the areas of the of the underlying business that we need to attack. Yeah.

And and, you know, I've heard you say that companies aren't just launching a website. They're inventing cost or excuse me. They're inviting customers into a better way of doing business. What's an example of something you've seen a distributor put online that genuinely changed how its customers work rather than simply just moving an existing transaction to a browser? Yeah.

It's great great question, and and it's simple stuff. And, you know, and when we work with our with our customers, you know, that's one of the key things that we really try to to focus on is, you know, the their end user customer is just trying to get their job done. They're just trying to get some work done. And so, really, our customers win the cart if they can position themselves as the easiest to do business with. And I'll give you one, you know, really simple feature that we built for somebody that that just sort of shifted that thought process a little bit.

Their customer they're in plumbing plumbing distributor, and so their customers are contractors doing regular jobs, and that's sort of the way the customer thinks about it. So they're doing a hot water heater, replacement at the Lewis House tomorrow, or they're, you know, doing a bathroom overhaul or a kitchen overhaul or or something along those kinds of lines. And so there is the traditional shopping experience. I can go to the product menu and drop down and navigate sink category and then navigate to the drain category. But we created a feature that allowed the customer to shop by job.

And, really, what we were doing was you know, kind of think of yourself in Home Depot and and you're the contractor and you gotta, you know, skate across the store to get the, you know, the sink over in this aisle and a faucet over in this aisle and a drain over here. We just brought all the related categories together under that job. And so it's really like bringing all the everything you need into one aisle. So the the customer, you know, the contractor says I'm replacing a hot water heater, clicks on that job, and then just clicks through the related categories to build up, you know, the the stuff that they're gonna need. So just reorienting to the the site navigation to think about how the the customer themselves are thinking about it.

Much of that isn't a thesis that you have before you start working with a distributor versus what you develop through your discovery and your kinda intimacy with the brand? Is it a is it a mix? It it is a mix. And, you know, one of the things and and, again, this is we think one of the things that differentiates us, We only work with wholesale distributors. That that is our area of expertise, and we've done, you know, 70 plus sites, you know, over the years and have ongoing relationships with, you know, 50 customers.

So we're we're in this space constantly. And so, one, it allows us to build a portfolio of features like that. That shop by job feature now shows up on half a dozen sites that, you know, are customers of ours. So we get to bring a lot of that experience to the table when we first meet with somebody, But then also just listening to them and listening who their customer is and beginning to understand how they do business and how they differentiate themselves in the physical world gives us ideas about, you know, what we could do on the digital side to to carry some of that forward. One of my favorite aspects of Impacts is that you guys also have software applications that you can utilize as special utility when needed.

Can you talk a little bit about what those are and why they exist? Yeah. So what what we're looking to do is, again, we're just looking to add additional utility, to the distributors, ecommerce presence so that, you know, they're adding a more value for their customer and, again, positioning themselves as the easiest to do business with. So when you look at, you know, some of the things that we've built as products, we have this one that is an HVAC system builder. So a a contractor goes in and a HVAC HVAC system, for people who don't know, there's three pieces to it.

The the piece that's outside, the piece that's inside, and your furnace. And all of those have to work together in a very specific defined manner. And so, you know, a lot of our distributors that are in HVAC, that's a very manually intensive process to kinda put that together. So we we built a tool for it. So we connect into the AHRI database, which is the certification agency that, you know, certifies that these three pieces of equipment will work together.

And we merge that with our customers' product data, and now their contractor can build a compliant system on the fly on the site. So that's just one example. Another one that we did that's that's really getting a lot of positive traction, so much you think about the product detail page. You know, the so much of the information about the product is buried in a digital asset that we're attaching to it. Right?

Service manual or an installation guide. And we we built a AI chat, interface or, you know, agent, that takes all those documents in, and digitizes them and and makes them available through a chat experience. So what's interesting is that it was targeted at the external contractor, who basically wanna is on this private retail page and just wants to ask a question. Will this will this piece of equipment work in a high temperature, high humidity environment, and and get an answer. But what's interesting is while the contractors are using it, our customers' counter staff are using it.

And one of our customers actually said, you've taken all of my counter people and turned them into product experts, which is actually a challenge at distribution because a lot of that knowledge is aging and moving out of the business. And, you know, that's the kind of knowledge that has just sort of gained over years and years of experience. I love that one. Well, let's talk about those people. So what is the what is the your vision or or role of the salesperson in a world, where things are moving more and more digital?

I'll tell you my thesis. I I I think, you know, back in the early two thousands, we did ourselves an injustice in the world by basically saying everything's gonna move online and that there's channel created the concept of channel conflict. And essentially, we created this competition between the sales reps and digital. And and a lot of businesses, the sales reps are holding everything tightly and not moving it online as fear of losing commissions, losing customer intimacy, etcetera. So I'd love to hear kinda how you think about it, Bob, the role of sales in a world of digital.

Yeah. And, you know, the the most of our customers and and, again, it really depends upon the industry that you're in. But a lot of our our customers sell complex products. And what differentiates them from their national competitors. Their national competitors are generally, you know, have a big catalog of products.

You know, they're they're online. You can find that product, put in the cart, and check out. What differentiates our guys are they have more of a collaborative relationship with their customers where they are able to talk in the context of that job or this bid that, their customer is working on and help them assemble the right the right products for that. So that's a lot of what happens. And, you know, if the if really the way I look at it is that the opportunity for digital is to take a lot of that, low touch business, move it to the digital channel, which really is actually freeing up the the salesperson to spend more one on one time with the customer and really understand what some of their challenges are and handle those those more complex, interactions.

So it's really not a displacement of the salesperson at all. It's really creating an opportunity for them to spend more value add time with the with the customer. And I completely agree. I've never met a sales rep who says they have enough qualified leads. I've never seen a sales rep who says they have enough time.

And so if you use digital appropriately, you can spend more time on the apps that matter most, which means you'll make more money. So I'm Yeah. I'm aligned to that thinking. Yeah. A 100.

And and, honestly, some of that conflict just comes from organizational setup. I was doing some work with a large, electrical distributor in the Pacific Northwest, and I was interviewing one of their customers because we were really struggling trying to understand why is customer adoption not getting to where it should be. And I was interviewing one of the customers, and I said, I can see. I can see you're on the site, you know, every day. You go to product detail pages, but you never put anything in the cart.

Why not? And she said, well, my sales rep, Billy, said, you know, use the site to find the products that I want, then give him the list, and he'll make sure I get the best price. And so I was like, oh, man. We've what we really have here is an organizational conflict that's getting in the way of things. And as it turned out, sales reps were not commissioned on online sales in that organization.

So we put a barrier we put an artificial barrier in place. Once that was fixed, online sales started to take off. Yeah. Adam Smith's unseen hand. You show me the For sure.

Comp you show me the comp plan, I'll show you the behavior. Yeah. 100%. Well, that's fascinating. Well, let's let's let's pull on that string a little bit more around adoption of digital.

And one of the key things I we're in the battlefield together every day trying to talk to to to distributors about measurement. And so when you think about measurement of effectiveness of a b to b digital channel, what are some of the things that you guys go into that calculus? Yeah. It's it's it's that's a great question because people really struggle with that. A lot of people get wrapped around the axle on, your percent of sales online.

You know? We're either winning or losing because of the amount of money that we're generating through the online channel directly. And, you know, the the point that I make with them, and and actually there's a a feature we just added to our analytics package, there's a tremendous amount of contribution that the site is making to sales that you're not accounting for. And so now we we've got one of the dashboards that we added to our analytics package is attributed sales. So we're pulling in ERP sales data.

We're merging that with the analytics, and we can tell you, yes, you might had a $100,000 of sales direct online through the site, but I can tell you there's another 500,000 in sales that happened where the customer was on that product detail page within the last five days, but then placed the order through a different channel. And so the site is contributing to those those kinds of things. And so that's that's the risk of, you know, sort of looking at percent of sales online. Obviously, customer adoption is a big thing. But, honestly, the the most successful customer I have seen when it comes to, metrics and driving customer adoption.

The biggest thing that they did that, you know, businesses are hesitant to do is they pushed the metrics down into the rest of the organization. So in these in these wholesale distributors, you know, I'm I'm a wholesale distributor, and I got I have 30 branch locations. It's really an interesting dynamic. That's 30 individual businesses who make their their own decisions about how they're going to sell in the in their particular branch or in their territory. And so pushing the metrics down into those branch locations, that's where you start to affect behavior inside the organization.

So the branch location has a, you know, a 10,000,000 target for the year, but 20% of that is digital, now they're thinking about that. Now they're thinking about, you know, we need to educate our customers on the value of the site and how they can benefit by using it because we've got our 20% target to make. And so I think that's really the difference that I see. It's it's one thing to identify the measure the metrics and measure them. It's another to push them down into the organization to help you affect change and and that's really where it makes a difference.

Well, let's let's talk about change management because Yep. You know, obviously, that's probably the bigger issue here. It's probably not a technology challenge, although I would say that great technology is a big enabler of change. But, ultimately, if people or distributors do business a certain way, getting them to, you know, change a couple of degrees to the right is a lot of effort. How does impacts and how do you personally get involved and have conversations around change management?

Yeah. That's a that's a a great point, and it's an integral part of any, you know, engagement that we have with our customers. And and we talk about it actually right from the beginning is that, really, you know, the the secret to success in terms of you you regardless of what we say, everyone's gonna look at the sales that come through the site. So, you know Yep. Okay.

We're they're distributors, so they sell things for a living. So it makes sense. That that is a key metric. But in order to do that, if you think about it in a b to b world, it's not as easy as, you know, just driving an ad campaign, you know, through Google and, you know, people show up and buy stuff from you. You've gotta get the customer to register.

You've gotta get the customer to engage with the site. You've gotta get them to place that first order and and, reach a level of trust with the site because everybody's got their own pricing and and things like that on there. And so, really, the secret to customer adoption is internal adoption. So when we're when we're focusing with people on, you know, developing a channel, throughout that whole process, we're sponsoring, you know, internal education on the value of what the new features on this site are gonna do for customers and how that's gonna make, you know, this person's job easier or your customer's job easier. And we're really preparing the internal organization to be champions of the site site when it hits the street, you know, well before, you know, we're we're hoping that customers just sort of find it and get on there.

So that's that's definitely a key part of what we do. And, you know, the change management is slow because in in the wholesale distribution space, what's what's kind of interesting about it, most of our customers, particularly in, you know, mid market distribution, they're multi generation family businesses. And so that permeates throughout the organization. So most people in those organizations have been there ten years, fifteen years, twenty years. And so getting them to think a little bit different about, you know, sort of how they're gonna do business, it it takes a conscious effort.

So we we work with the ecommerce team. We work with the sales team. We work with the marketing team. We work with the different branch locations, and we really start educating and pushing that that change management aspect almost from the outset of the the beginning of the project? Yeah.

If I'm being honest, there's a lot of great commerce platforms out there that can utilize that can deliver b to b utility. There's a lot of good agencies that can stand it up. The ability to pick the right one and to actually help with change management and adoption and, frankly, measurement. Because I do think the thing you didn't say, which I I know you would if you had more time, is there's things that make bad costs go away. The the customer service call to the branch as an example.

Those Right. Those also need to go into the calculus of of the value of digital. Oh, 100%. Yeah. The the customer self-service events.

Because you you just think about all the things that somebody wants to know in a business. I wanna get a copy of my statement. I wanna get a copy of this last order. Can you tell me what's what when did I last order this particular product, or I wanna reorder something? Yeah.

Those are those are big activities. And actually doing well with those kinds of things on the site as just sort of a a tangent, paying invoices. You know, being able to support that kind of thing directly on the site actually helps drive customer adoption because those are daily activities that customers are doing every day. And so if that's easy to do through the site, they start using the site more, start getting more comfortable with it, purchases start flowing through it. So, yeah, that's absolutely an important part of, a b to b b to b site in these days.

I saw a data point from a Salesforce report that actually analyzed where distributors sales reps spend their time, and the report basically said that they only spend about 30% of their time actually selling, which means that they spend 70% of their time chasing down invoices, doing customer service, where's my order, that kind of stuff and travel. And so if digital can help win back time, usually, that falls back to the bottom line. Yeah. A 100%. In fact, we we quoting.

Quoting is a big part of what, sales guys do. We have we have a customer in industrial that gets, you know, a thousand plus line document every day from one of their major customers that have to be quoted. They divide that thing up, amongst seven different sales rep to just get as many of them quoted as you can by the end of the day. We talked we talked a little bit earlier about, you know, some of the utilities that we've created. We created one called OrderX.

That document will come into that. We're matching it up. So we're doing we're getting 80% of the work done so that, you know, then the sales rep just comes in and and checks it and pushes it on through. So quoting is a big thing as well in the in the space. Love it.

Well, you not to aid you, but product data has been part of your career before the concept of PIM was really a mainstream category. I think that's true. How does AI change what good product data means for a distributor and a wholesaler? That is a great topic. And you and I had a we we did a session on this, a little while ago.

I think it's going to change dramatically. You know, we've really been focused on I've always said that, you know, the the product content has to be good enough that the shopper can confirm this product is gonna work in the application that I have. I mean, that's that's really sort of the key. Can I can I tell that this thing is gonna work in this high temperature, high humidity environment that I have? But now so and and we've also sort of, you know, built our product content around SEO.

So I I I wanna be able to be found on Google. But as this thing really continues, this notion of agenda commerce and and agents doing the shopping on behalf of customers. It's happening in retail. It's definitely gonna happen here at some point. And so now you've got an agent that's speaking to an agent on the distributor side saying, hey.

This part's wearing out. I need to replace it. What's the price and availability, or give me a comparable substitute? And that needs to happen or you're it's not that you're just gonna get demoted to page two on, you know, the Google listing. They're just gonna bypass you.

The agent's just gonna say, yeah. That's a no. I gotta move on. So I I really think the whole way that we've been thinking about product content is going to shift, and it actually creates more burden for the distributor because the distributor's already at a disadvantage when it comes to product content. Because if you think about it, they're selling, you know, a thousand different manufacturers' products, and so they need to do a lot of the normalization.

They need to collect that data. They're managing it. A lot of in a lot of cases, they're managing it on their own. So I I really do think that's that's sort of the next big shift that's gonna need to happen, in our space here. Yeah.

I love it. Yeah. I remembered our our webinar. That's why I went back to that question. Yeah.

Let's, let's go with a good closer here. I'm gonna try and put you on the spot and make you flex your brain. You've been you've worked you've worked with wholesale distribution for the lion's share of your career. Yeah. And I tell you that the rate and pace of change that we're seeing right now in technology is just something I've never seen.

So what is something that merchants or sorry, distributors are obsessing over right now that in five years won't have mattered? Yeah. That's a that's a great question. The it's and it it as a technologist, I'm right there with you. And, again, you said you weren't gonna date me, and and this will probably date me a little bit as well.

But I came out of college writing code at a terminal that was, you know, connected to a mini computer. And then I saw, you know, sort of my whole career has been in this technology space. I saw client server come to, you know, fruition. And then, you know, the the birth of the Internet. I remember being at a conference when Netscape went public and, you know, just amount of, you know, enthusiasm that that that inspired.

This AI wave, I've I've and mobile. AI, I've never seen an adoption curve as fast as this. It's really just remarkable. I mean, when you think about it, ChatGPT launched less than three years ago. And look at where we are in, you know, that period of time.

Right now, there's just a tremendous I to to kinda get back to your question, there's an obsession with AI. But I and and what how do I use it? How do I get advantage of it? What am I gonna get left behind on? But I think the pace at which it's evolving right now, it's just going to find itself ingrained in the everyday activities of the business so that, you know, five years from now, it just happens.

It just you know, there's there's no coding. There's nothing I'm doing. It's just part of my business. I love that answer. It's gonna it's gonna work its way in the way we just simply run the business.

Because right now you're right. On a We're looking at all these different point solutions, and we're still operating through diff yeah. I completely agree with your answer. I loved it. Yep.

Yep. Fantastic. Well, Bob, thank you for joining me on Commerce Famous. If for anybody who attends shows like TUG or p twenty one or a member of any of the electrical distributor, associations, Bob is absolutely commerce famous. So thank you for being on the pod, and we appreciate your partnership.

Yeah. No. Thanks for having me. I really appreciate it.